Showing posts with label PIerre Moscovici. Show all posts
Showing posts with label PIerre Moscovici. Show all posts

Sunday, November 3, 2013

France unites against François Hollande

Even the Left is turning hostile to the president, says Anne-Elisabeth Moutet
President breaks records of unpopularity as even the French Left turns hostile
Francois Hollande has built his career on being a canny political manoeuvrer Photo: Reuters
As he stood at a military airport last Wednesday to greet four French hostages released by al-Qaeda militants in Niger, François Hollande could have been forgiven for thinking his disastrous run of bad news in the past months might finally be coming to an end. 

Having announced an assortment of taxes the previous week, Mr Hollande suspended most of them over the weekend after widespread popular protests. He had managed to unite unlikely bedfellows, more often at loggerheads against one another, in the fiercest demonstrations seen in Brittany in a decade.

A proposed green tax on lorry fuel that would raise transport costs by 4 per cent had brought out farmers and supermarket owners as well as labourers and trade unionists, brandishing the black and white Breton flag as a symbol of their outrage against the cluelessness of Parisian technocrats, of whom Mr Hollande is a central member. This was the face of a future French Tea Party, a political development that seems increasingly likely.

Mr Hollande also had to “suspend” — a word that fills the French with unease, as it promises a stealthy return of the same measures whenever the fracas dies down — a 15.5 per cent retroactive tax on savings schemes that seemed tailor-made to infuriated his most natural voters.

A Parisian barrister, himself not a Hollande voter, told me that his Portuguese-born cleaning lady, a single mother of five children, had sworn never again to cast her ballot for the president, as she did last year. “You work hard all your life, you do what’s right, and then they come after the little bit you’ve managed to put aside for your retirement age?” she said. “What kind of a Left-wing government is that?”

Once again, the government’s “method”, if it can be called that, seemed to be to first float the idea of a new tax for a few days, then back down if the outcry became too loud. “It’s probably the worst way you can run a fiscal policy,” says Erwan Le Noan, a competition lawyer and international consultant. “The amateurism and uncertainty alone mean businesses have no visibility, and will defer investment — and hires — as long as they possibly can.”
 
An insider suggests that the ministry of finance mandarins at the Treasury and budget departments, held in check by their previous bosses, have been trying out all their pet tax plans, even the most outlandish, on Pierre Moscovici, the finance minister, and Bernard Cazeneuve, the budget minister. “Moscovici believes the tax burden is as high as it can go, but he has little authority,” says the insider. “Cazeneuve, his junior, is a hard-working realist, but he suffers from having been an exemplary European affairs minister. He is convinced that France must abide by her European Treaty obligations, which means reducing the deficit. Since the spending ministries do not really want to make hard cuts, the only way — or so he thinks — is through more taxes.” The Laffer curve theory (too much tax kills tax revenue) does not seem to have made it to Bercy, the massive brutalist fortress built 20 years go to accommodate the finance ministry’s plethoric troops.

An unchecked French civil servant can think up some pretty outlandish tax ideas. The French property market is under threat of a new rent control law. This is the pet project of Cécile Duflot, the housing minister and a canny Green ideologue who believes, against all concrete evidence to the contrary, that it will make rents more affordable. Paris estate agents reply that this, alongside the heap of protective regulations skewed towards renters, has already convinced many landlords to just sell and get out, even though the law has not yet been passed.

This is, however, small beer next to an earlier proposal, last June, by the Conseil d’Analyse Économique, the prime minister’s office’s forward planning think tank, advising the creation of a “virtual rent” that all property owners would pay, in order to restore more equality between households burdened with rent and the other, rent-free ones. After the CAE report came out, the subsequent fury caused the virtual rent proposal to be shelved, “but that shows you how they think”, says Mr Le Noan. “People remember this. They have no trust at all in this government.”

The beginning of the week saw Mr Hollande’s ratings plunge even lower than before, breaking records of unpopularity. Two separate polls have given him the worst ratings of any French president. Their breakdown shows, perhaps predictably, implacable, near-total hostility (93 per cent for one, 97 per cent for the other) on the Right; but opinions on the Left and within his own Socialist party are solidly negative too. He is perceived as “lacking courage”, “indecisive”, “incompetent”, “weak”, even “incoherent”.

To the French who elected him in May last year, Mr Hollande controls nothing and has no authority anywhere. Not in his own home, not in his party, not in his Cabinet, not in the country, and not — after Barack Obama eventually spurned his offer of military help in Syria — in the world.

The one bright spot in which he received across-the-board support was the French intervention in Mali, back in January. In two weeks, French troops, called by the Malian president Dioncounda Traoré to help the country fight an Islamist invasion in the north, pushed back the rebels, liberated Timbuktu and stabilised a country whose fall to al-Qaeda affiliates would have been a disaster for several French allies, from Algeria to Sudan. This was perhaps the model of a foreign expedition done well: experienced troops knowing the region, limited and clear aims, regional and local support. Mr Hollande, quite rightly, saw his popularity edge back up. Visiting Bamako, the Malian capital, in early February, basking in popular adulation, he told an enthusiastic rally that this was “the most beautiful day of his political career”.

And one he’s seemingly tried to replicate ever since — it’s probably the reason why he was so gung-ho on a Syrian intervention, even though French intelligence is perfectly aware of the complexity in which the Syrian rebellion is mired. It was therefore difficult not to wonder at the timeliness, in political terms, of the four hostages’ liberation. Questions about a ransom were raised immediately. Mr Hollande denied any payment had been made.

For one moment, it seemed as if Mr Hollande’s luck might turn: Marine Le Pen commented on television on the look of the head-covered and bearded hostages, implying they might have been “Islamicised” in captivity. It was tactless and crass — a boon, you might think, to the mainstream political class, who duly grabbed the ball and ran with it in their hurry to re-demonise the Front National leader.

Their moment of good, clean fun lasted only for a couple of hours. That very afternoon, Le Monde came out with an authoritative piece of reporting laying out the different stages of the negotiations that succeeded in getting the hostages back, complete with payment of €20 million (£16.9 million) to the kidnappers and Malian intermediaries. Intelligence experts in Paris agree that the article was completely accurate, “with great chunks taken under dictation, I should say”, one jokes.

They explain that Mr Hollande took the negotiations off the hands of the French intelligence service, DGSE, to give them to a series of local intermediaries and presidency advisers, exactly the same type of associates that Mr Hollande, in opposition, criticised Nicolas Sarkozy for using. The implication is that DGSE leaked the entire story to Le Monde, furious both at this and because the ransom, of which they disapprove, seems to have been paid out of their own budget.

You can get away, in French politics, with lying, or looking extremely likely to have lied, to the nation. Mr Hollande’s job is as safe as the Fifth Republic constitution makes it, which is very safe indeed. But as for the hoped-for reprieve in the polls? That is not happening.

How long can this last? Normally, until the next presidential and general elections, which are in 2017. There are no provisions for getting rid of the president, unless he resigns or calls for an early general election, which will not happen. Nationwide municipal elections will take place in March, and European Parliament elections are scheduled for May. The municipal elections, and local deals for the second round, explain why Mr Hollande has been pandering so much to the Greens and the Left of his party. Voting in the European elections, on the other hand, is full proportional representation, which makes them, in effect, a life-size poll.

Ms Le Pen’s party is expected to poll somewhere between 25 per cent and 30 per cent, and, as an MEP herself, she has already been busy making European alliances for the day after. Her platform, in many ways, is indistinguishable from that of the hard-Left: protectionist, anti-euro, anti-capitalist, pro-national regulations, supportive of Bashar al-Assad’s Syria. She is hoping to steal from Mr Hollande many of the disenchanted voters on his Left.

Mr Hollande may not be a very successful president, but he has built his career on being a canny political manoeuvrer and, like a rabbit in a Citroën’s headlights, he understands this, without being able to change his essential nature. He is currently pondering a Cabinet reshuffle — from all accounts unenthusiastically, as it means a complete rebalancing of his majority such as it is, for less than game-changing results. He is therefore likely to keep trudging on, earning himself a place in the Guinness Book of Records in the chapter on unloved political leaders.

© Telegraph Media Group & Anne-Elisabeth Moutet, 2013

Thursday, February 21, 2013

Titan boss Maurice Taylor says it's a hard job getting the French to work

A row with Maurice Taylor, the US tycoon behind Titan tyres, shows how employment and tax laws in France keep the idle in business, says Anne-Elisabeth Moutet
 
Working lunch: the boss of the US tyre firm Titan has accused the French of taking long breaks and being unproductive
Working lunch: the boss of the US tyre firm Titan has accused the French of taking long breaks and being unproductive Photo: Getty Images
 

If Maurice “Morrie the Grizz” Taylor didn’t exist, François Hollande’s embattled socialist government would have tried to invent him. Just when the government’s bluff was being called over France’s unrealistic growth predictions by the EU (finance minister Pierre Moscovici kept promising 0.8 per cent for 2013 until Tuesday, when incontrovertible European figures forced Hollande to admit that it will be much closer to zero), here comes the textbook Ugly American from Illinois, boss of the Titan tyre firm, thwarted in his dastardly aim to lay off French workers from an ailing tyre factory he was hoping to acquire, now spitting venomous slurs at the entire French working population.

Cue, on all news channels, the perfect Two Minutes’ Hate (more like two days so far) in which everyone — union reps, party leaders, the commentariat — bemoans in touching unison the gall of this unreconstructed, boo-hiss Anglo-Saxon Reaganite, who, in a letter to Arnaud Montebourg, the minister for industrial renewal, asked: “Titan is the one with the money and the talent to produce tyres. What does the crazy union have? It has the French government.” Taylor added: “The French workforce gets paid high wages but only works three hours. They get one hour for breaks and lunch, talk for three and work for three. I told this to the French union workers to their faces. They told me that’s the French way!”

The letter was leaked within hours to a business daily. Montebourg, a former militant barrister whose grandstanding habit had been curtailed for a couple of months after he insulted Lakshmi Mittal for wanting to close loss-making steel furnaces in Lorraine, grabbed the opportunity to get back into the limelight. He claimed in an open response to Taylor that “the entire French population had been grievously insulted”, and listed the many American industrial investors who managed to make do with France’s 35-hour week and strict labour laws.

Morrie the Grizz has in fact given a free-spending, high-taxing government the perfect moment to bury more bad news. Intent on reversing Nicolas Sarkozy’s reforms, Hollande has already rescinded the very timid pensions change in which retirement age had been pushed, with exceptions, from 60 to 62. Ditto for a mild attempt to curtail the comforts of a Socialist-voting public sector that employs a quarter of the labour force: to fight chronic absenteeism, Sarkozy had instituted a day without pay before civil servants would be paid for sick days. Civil service minister Marylise Lebranchu announced yesterday that it was reversed, in an interview with the newspaper that had published Maurice Taylor’s letter.

Consider that two of the best-selling books in the past decade were Bonjour paresse (“Hello, Laziness”) by Corinne Maier, employed by the largely state-owned utility EDF, in which she rolled out a number of clever strategies to do the least work at the office, and Absolument dé-bor-dée! (“Li-ter-al-ly Snowed Under!”) by Zoé Shepard, a civil servant who vividly described her experiences in the Aquitaine administration of “how to work 35 hours in the month”, from sick day competitions to misappropriation of expenses.

These books sold well because they rang a familiar bell. The French are used to long queues at one counter at the Post Office while three more people behind closed desks carry on private conversations. And don’t try to call someone for business between 12.45 and 2.30pm in Paris. Every time the notion of opening up Sunday trading is mooted, an alliance of family associations and unions kills off the attempt with pieties about “the family day”, no matter that Sunday sales sometimes exceed half the week’s takings in stores (like Ikea) that, with staff support, brave the law and pay the fines. As for the 25 mandatory days of paid annual vacation, no one, Left or Right, has suggested that they should be reduced.

Yet once you get them into the workplace, the French can be efficient, competent and hard-working: 2011 OECD productivity figures show them coming first in Europe at $57.70 per working hour, ahead of the Germans at $55.80, and of the British at $47.20. No wonder: labour is expensive (payroll levies amount to 65 per cent of total salary outlay) and stringent employment laws make it difficult and costly to fire anyone. A French boss will wait to breaking point before he will hire anyone – and in the meantime that production will have been automated to quasi-Japanese standards with the best robots extant: machines, unlike people, are not subject to employment taxes. The losers are the young, the over-50s, and anyone who’s had the mischance to fall off the protected ship of the full-time employed. Structural unemployment, even in boom years, has very rarely fallen below 8 per cent. It exceeds 11 per cent today, and almost all of those claiming the dole would have welcomed the opportunity to work for Morrie the Grizz.

© Telegraph Media Group & Anne-Elisabeth Moutet, 2013

Sunday, December 9, 2012

Arnaud Montebourg: France's love-hate relationship with 'the madman on the third floor'

He is the firebrand minister who told Indian industrialist Lakshmi Mittal that he was "not welcome in France". He is also the surprising new hero of the Left, as Anne-Elisabeth Moutet writes.
Arnaud Montebourg: France's love-hate relationship with 'the madman on the third floor'

In happier times: Audrey Pulvar announced her split with the minister via the media Photo: REX FEATURES

He is the grandly-named and grandstanding "minister for productive economic recovery" - an outcome which France, and Francois Hollande's struggling Socialist government, sorely needs.

But to say that all is not well with Arnaud Montebourg, a firebrand and populist left-winger who opposes most of the features of a modern economy, would be an understatement of equally grandiose proportions.

And the fact that this weekend he remains - just - in his post indicates the confusion at the heart of the French government.

Last weekend Montebourg, 50, had almost resigned; on Wednesday he was very nearly fired by Jean-Marc Ayrault, the prime minister, who gave him a sharp dressing down in front of group of goggle-eyed Socialist MPs.

Only the previous week, he'd been dumped by his high-profile girlfriend, Audrey Pulvar, a television personality who let him know by a text message she sent Agence France Presse.

Speculation on the beautiful Miss Pulvar's reasons for deciding to end their very public affair is rife, but everyone in France is well-aware of how Montebourg ended in the political doghouse.

A former crusading lawyer who built up popular support on the left of the Socialist party, and beyond, for his anti-corruption, anti-globalisation views, Montebourg drew international ire and national dismay for his response to industrial negotiations on the possible closure of the loss-making Lorraine steelworks at Florange.

He proclaimed that their owner, the Indian tycoon Lakshmi Mittal, was "not welcome in France" – where Mittal still employs some 20,000 people in many other locations.

 Coupled with a threat - now seemingly abandoned - of "temporary" nationalisation, in a style not unlike the General Motors bailout, of the Florange steelworks, this gave out a strong echo of the last time a Socialist government took over in France: more than 30 years ago, in 1981, when President François Mitterrand's Socialist-Communist cabinet decided to nationalise banks and large industrial corporations.

This is not the impression Hollande, and especially Ayrault (who happens to have a Mittal plant in his own Loire Atlantique constituency) want to make on the financial markets.

Until now they have kept lending to France at exceptionally reasonable rates - a smidgeon under 2 per cent for 10-year bonds, despite the recent downgrade from AAA-rating by Moody's that followed a similar move from Standard & Poors in January.

In the almost seven months since he took office, Hollande has acquired a reputation for economic shilly-shallying: hefty tax increases on business were almost immediately followed by tax breaks, for instance, while an announced 60 per cent capital gains tax for start-up entrepreneurs was rescinded after a few days of furious Tea-Party style Facebook campaigning by opponents. But so far this has not been punished internationally, even though it has translated domestically into the worst poll ratings of any president of the Fifth Republic since 1962.

Ayrault was of a mind to let Montebourg go, supported – even egged on – by Pierre Moscovici, the finance minister, who in theory is Montebourg's boss, but in practice has been frequently outshone by the figure referred to by many at the ministry's mammoth futuristic pile on rue de Bercy as "the madman on the third floor".

Their partnership is hardly a meeting of minds: Moscovici, a former European affairs minister under Lionel Jospin 10 years ago, is of a moderate Social-Democrat bent: pro-European integration, pro-business. Montebourg, by contrast, voted No in the 2005 referendum on the European constitution and would block the import of goods from countries without social welfare provision.

"Mosco" had loathed Montebourg's ideas from the start, but things rapidly became personal as well.

After the election, but before the finance team had moved into Bercy - the name by which the ministry is known - back in May, Moscovici was forced to adjudicate on territorial disputes caused by Montebourg.

The office of the finance minister himself is traditionally on the sixth floor. Montebourg tried to dislodge the budget minister, Jérôme Cahuzac, from the floor below, at the same time as attempting to appropriate the parking space in the courtyard assigned to the foreign trade secretary, Nicole Bricq.

In both cases Montebourg's machinations failed and he ended up, fuming, on the third floor, even further down the building than the minister for tourism and trade secretary, Sylvia Pinel. Tempers have only deteriorated over the following seven months, while the country's economic and political governance has given an impression of endless flip-flopping.

This may sound more like Big Brother on steroids than proper political disputes, but it's emblematic of the confusion reigning under François Hollande.

France's president made a lifelong career, as regional politician and party boss, of being a master of compromise, conciliating the Socialist Party's various "currents" by granting favours and advantages according to precisely-calibrated assessment of weight within Hollande's view of the ideal political balance at any given time.

Hollande is very much aware that a majority of his Socialist base likes Montebourg's flamboyance, even his gaffes – which they see as speaking truth to powerful interests. In the Mittal crisis, some polls found up to 63 per cent of French opinion supporting Montebourg's stance.

Unlike the German SDP or Britain's New Labour, the French Socialists have never formally renounced Marxist theory, and even the name "social democrat" remains a political insult in many quarters.

And this is before taking into account the sensibilities of the myriad parties to the left of the Socialists – the Greens, three small Trostkyite parties, the rump of the once-mighty French Communist Party, and a couple more tiny splinters – whose votes, added up, ensured Hollande's victory over Nicolas Sarkozy last May.

Because of France's first-past-the-post system, the Socialists enjoy in fact a clear majority in both houses of the French parliament, but still Hollande calculates as if hamstrung by a coalition, perhaps aware that he has to keep several currents within his own party from defecting to the militants on the Left.

His resulting indecisiveness is worsened by his own nature, as well as by his single previous experience close the presidency. He was a junior aide to François Mitterrand in the 1980s, and learned much from the wily old politico - who always arrived late everywhere and famously believed that you should "give time to time". In other words, wait and see how a situation would decant.

It worked for an autocrat like Mitterrand, born in 1916, and who viewed the telephone as a cutting-edge technological device. It is far less effective in Twitter time, in a man whom neither best friend nor worst foe would ever think of calling an autocrat.

And so when Montebourg spoke of "nationalisation", Hollande crucially stayed silent for five days, even inviting the troublesome junior minister to the Elysée to assure him, Montebourg afterwards said, that "nationalising the Florange steelworks until a credible buyer [was] found" was "still a possibility".

Hollande staved off Montebourg's resignation, seemingly only to let his prime minister threaten him with the sack four days later.

Hollande had his reasons – Montebourg increasingly appears to Lakshmi Mittal as the pitbull the president releases when his concessions are seen as just not good enough – but such tactics carry their own risk.

Emboldened by Montebourg's stance, and a militant political vocabulary unheard from a cabinet minister for decades, enough Socialist defectors voted with the Communist group in the Senate to defeat the Budget and the bill funding France's state health and pensions systems last week.

This was only a warning shot: both bills will now be amended, and are likely to pass the next time they return to the upper house. But the impression of weakness remains - even as most of Hollande's campaign promises, including new civil service jobs, lowering the retirement age and more teachers, go unfulfilled.

Meanwhile Montebourg is fuming at his treatment by Hollande and Ayrault, but upbeat in one respect: amid all the publicity he has become a hero for the Left.

When he stood in the last Socialist Party primary elections for a presidential candidate, he received just 17 per cent of the vote. If Hollande's government goes on giving the impression that no-one is really at the helm, the inevitable clamour for change next time may mean there's a demand for even more grandiose promises.

In the strange world of the French Left, Montebourg may consider his own prospects of becoming president himself have just risen, from impossible to merely improbable.

© Telegraph Media Group & Anne-Elisabeth Moutet, 2012